Insurance costs keeping many from rebuilding


WAVELAND — For-sale signs decorate vacant lots up and down U.S. 90 from Long Beach to Waveland.

While the bigger cities of Biloxi and Gulfport are moving ahead with billion-dollar casinos, condos and resort developments, the smaller cities of Waveland, Bay St. Louis, Pass Christian and Long Beach are struggling in the aftermath of Hurricane Katrina.

The areas nearest Mississippi’s Coast look much as they did a year ago. About 2,000 people who called Long Beach home on Aug. 29, 2005, have not come back. Predictably, the city is bringing in 20 percent less revenue than before the storm.

The story is the same in the other small cities west of Gulfport. About 8,700 people who used to live in the towns have not returned. That’s more than the entire population of Bay St. Louis before the storm hit.

“The insurance is so high that they can’t get mortgages. That’s the big problem,” said Mercille Wilkinson of Waveland. “You have to have insurance to get a mortgage, and the insurance rates are so high nobody can afford them. Thank goodness we didn’t need a mortgage.”

Almost two years ago, she and her husband, Walter, huddled inside a used recreational vehicle they had picked up a few days after Katrina and parked on the front lawn of their destroyed home.

In spite of her husband’s polished, can-do attitude, Mercille Wilkinson wondered whether she would ever live in a house again. But as Katrina marks its second birthday Wednesday, the Wilkinsons are inside their rebuilt home.

“Things are relatively normal now,” she said.

All it took was waiting for the debris to be cleared, getting lights and water re-established, receiving their insurance money, pestering the city for permits and building guidelines, getting the volunteer help of Mennonite carpenters from New England, surviving swindling contractors and swallowing insurance premiums that increased astronomically.

It’s no wonder the Wilkinsons have few neighbors.

A map hanging in Long Beach Mayor Billie Skellie’s office indicating destroyed homes and businesses looks like it was dipped in red ink. The storm wiped out virtually everything from the coastline north for four or five blocks to the railroad tracks that bisect the city.

The overwhelming majority of those structures were single-family homes, and two years after the storm, most of the owners have not turned the first spade of dirt to build back. Skellie said the economics of rebuilding don’t work for many of his former residents.

“What’s been slow is getting things built back that were knocked out south of the tracks,” he said. “I attribute a whole bunch of that to indecision on the part of people making an investment, and part of the indecision is the insurance and the cost of construction.”

The higher costs meant residents were looking at monthly house notes more than double what they paid pre-Katrina, he said. Many could not swing it, he said.

Cities from Long Beach to Waveland depend on property taxes from mostly moderate-income homeowners to fund city services. George Penick, director of the RAND Corp. Gulf States Policy Institute, said those people are having the toughest time.

“The family that lived in the $80,000 house two blocks from the beach, that same house is going to cost two or three times more (to rebuild),” he said. “If I was still looking at a slab and wondering when I was going to get back into a house, I would be pretty discouraged.”

But the land isn’t selling to people who will develop it, either. It’s sitting there while former homeowners work out their next step.

Following the storm, Skellie said, real estate agents drove up the price of land by encouraging former homeowners to hold out for high-dollar prices. The glut of available real estate, combined with the uncertainty in the insurance market, has kept the land from selling and the region from rebounding.

“A person could come out here and buy 50 lots off the beach. They wouldn’t even have to look hard. You probably could buy 300 if you want to buy them all. It’s for sale,” he said. “The problem is that it is sitting there.”

But Skellie is not too worried. The city has received a $17 million grant from the Mississippi Development Authority to rebuild the infrastructure in old downtown Long Beach. Skellie also is hoping for a high-rise condo development or two to spur some more commercial development along the beach.

It may take longer than many would like, but Skellie said he has seen how long it takes a small town to recover from disaster.

“Let’s put it this way – there were three or four parcels on the west end of our city when Hurricane Katrina came,” he said. “Those were parcels vacant from (Hurricane) Camille.”

That storm hit Long Beach 38 years ago.


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